News and analysis

Exciting prospects are opening up for Bitcoin after the former U.S. President Donald Trump, and the Republican frontrunner for the seat in the White House, addressed the largest crypto conference of this year in Nashville on the weekend. He backed up the essential need of setting up a "strategic national Bitcoin stockpile" to "never sell" the government's Bitcoins. Several days before the event, crypto adepts (or whistleblowers?) have begun to speculate that Trump was going to make an announcement of this kind, even though it marked a 180-turn from his publicly expressed opinion about Bitcoin as being "based on thin air", which was exactly Trump's original sentence from nearly 5 years ago.

As for July 2024, the same Trump proclaimed the U.S. as the future "crypto capital of the planet" in order to protect "property rights, privacy, freedom of transaction, freedom of association and freedom of speech”. "I want it to be mined, minted and made in the U.S", he declared while promising a "comprehensive" policy to cover all aspects like stablecoin regulation and the private right to self-custody Bitcoins and calling digital assets as "the steel industry of 100 years ago". "If we don't do it, China will do it', Trump argued, adding that "one day it probably will overtake gold", as "there's never been anything like it". More than this, Trump also said he is going to stop and end any efforts of creating the Federal Reserve's digital currency. This sounds like he would see Bitcoin as a partial substitute for the U.S. Dollar, at least in financing the country's budget and debt. Another quote is that Bitcoin regulations would be prepared by "people who love your industry, not hate your industry”. Trump fans wore "Make Bitcoin Great Again" hats. Following Donald Trump’s speech, republican senator Cynthia Lummis proposed a legislation with a task for the Federal Reserve of creating a one million Bitcoin reserve during the next five years. These Bitcoins are the equivalent of more than $60 billion now, and "will be held for a minimum of 20 years" with a purpose of "reducing our debt,” she commented. So, what can I say about the sentiment on Bitcoin as a response to the news? The "buy expectations, sell facts" maxima worked out again, so that BTC/USD briefly exceeded $69,000 but then dipped below $67,000 soon after Trump’s speech, and recovered to $69,700 early Monday. This was a natural behaviour from the technical point of view. Thus, I expect developing a consolidation pattern slightly below or around $70,000 on daily charts with a strong support area border between $57,000 and $60,000 as the basis scenario, with probably no immediate jumping higher to set new historical records, yet rather accumulating the strength for one week or even one month.

I surely would buy Bitcoins as close to $60,000 as possible, if the market allows it. However, I see a breakthrough chance well above $70,000 as the next move, and it may happen even ahead of a slow schedule. If so, I would not hesitate to purchase more of BTC/USD at the very first price appearance above $70,500. Bulls' attack could be marked and then postponed but not cancelled in this case. Anyway, most of the market participants would not seriously suppose the price coming down below $50,000 once again, based on "great leap forward" hopes. The last two dozens of weeks are seemingly creating the flag cloth formation to foresee a wake-up call for further growth at the end, with a flagpole extending from $40,000 to above $70,000, meaning a potential target price around $100,000. The move of autumn 2023 may repeat itself, but at higher levels.

The last, but not the least thing here is that short-term technical patterns' analysis in nearest days could serve as the only magic to clarify relative probabilities of the two major paths for BTC/USD described above. So, one may do a great job by watching small-scale charts carefully.

Visa stock lost nearly 4.5% of its market value this week, despite a 12% YoY surplus in its Q2 earnings on July 23. It came out at $2.42 per share basically in line with consensus estimates, but 3.5% below the previous quarter's record number, while the global card service's revenue rose 1.35% to set a new historical high at $8.9 billion. However, some large brokerage houses chose to cut their price targets for the company on growing concerns about slowing growth in customer spending, especially in the U.S. (due to higher interest rates) and China's payments industries.

These are just a few examples. Mizuho financial group reduced its price estimate for Visa share price from $275 to $251, while keeping a neutral rating. Jason Kupferberg at Bank of America Securities reduced his price target from $297 to $279, as the results were not as good as the banking institution actually expected, sparking "louder debates about the growth outlook for [Visa’s] core business, which we estimate slowed to ~3%". Visa's growth in the U.S. was just +5%, which was not surpassing the personal consumption expenditures (PCE) for the quarter, and therefore not above the inflationary pressure effects.

Argus Media, an independent provider of price information and consultancy services, is from a moderately optimistic camp on Visa, however it also revised its target area from $310 to $290, which only corresponds Visa's all-time high of March 2024. Arvind Ramnani at Piper Sandler maintained an Overweight rating for Visa but also cut the price target from $322 to $319, citing international transaction and data processing revenue lags "slightly below modeled estimates". A higher target, previously marked at $326 by Morgan Stanley analysts, has been lowered to $322. Will Nance at Goldman Sachs shifted its price target from $334 to $317, even though reaffirming a Buy rating, given "weaker volumes in APAC" (Asia-Pacific region) as well as "softer macro trends" in July.

Visa's CEOs confirmed their own full-year guidance for 2024 for "low double-digit" revenue growth and "in the low teens" for EPS, which means stagnation in the second half of the year considering current results. A white stripe was that cross-border volumes (excluding within EU transactions) added 14%, yet it may be attributed much to the spring and summer season of travelling.

Anyway, Visa share price is struggling around $255 for the last three days, with several attempts for intraday rebounds, but each time diving under this waterline again. New Buy positioning is possible only if the price will prove its resilience to the current bullish pressure to break through a technical resistance at $265 per share (here is an overnight gap level on July 23/24). Otherwise, a failure below $250 per share may lead to a short-term sell-off with a quick retest of a lower $228 to $240 range of October 2023.

Loopring (LRC) is experiencing a significant decline, dropping 12.5% to $0.1500, which is notably steeper compared to Bitcoin's (BTC) 1.3% drop to $67,220. This downturn is primarily attributed to a recent hack in early June resulting in a $5.0 million loss, which has sent LRC prices sideways. Despite this, the token managed to breach the resistance of the downside trend established on March 15, 2024.

There are two potential scenarios for LRC's future. The positive scenario with an upside recovery to $0.2000 has more chances to materialize. The downside scenario suggest a decline to $0.1000 followed by a subsequent recovery to $0.2000.

Chipotle Mexican Grill initially soared by nearly 10% in after-hours on July 24, after the restaurant chain revealed strong second quarter results, especially with an increase in margins (because of its pricier menu, and what else did you expect?) complemented by growing rice bowls and burrito demand. However, the stock retraced to keep less than 4% of its overnight leap, which gives me a reason to talk about a rare opportunity to buy cheap enough but on solid fundamental momentum.

Comparable sales in the same restaurants climbed 11.1% YoY vs consensus forecasts of a nearly 9%, with expected further growth "in the mid-to-high single-digit" percentage for 2024, CMG CEOs said. Their customers' foot traffic grew 17% during the quarter, when the average number of traffic increase was only at 0.63% in the whole segment of fast-food and quick services (according to Placer.ai). A major slowdown is here yet setbacks seemingly don't cross the way Chipotle Mexican Grill goes.

The chain's stock gained from $44 in January to nearly $70 per share in late June, when the split using 1:50 ratio happened. Of course, I calculate the pre-split prices considering the split, which gives more than 55% of a price jump in the first half of 2024. Later the price retraced by 25% to nearly $50 on worries about inflation damaging household budgets. Now we see that things go better than the crowd feared, and so the next recovery stage is probably not far off, even though this recovery may be preceded by another fall for a while.